• Statewide ADU Mandate, Requires North Carolina cities with at least 50,000 residents to allow accessory dwelling units by right on eligible single-family lots.
• Removal of Zoning Barriers, Prohibits municipalities from imposing strict parking minimums, charging excessive permit fees, or limiting unit sizes below 800 square feet.
• Support for Families and Income, Enables homeowners to accommodate multi-generational family members or generate extra revenue through long-term rentals.
• Broader Development Flexibility, Promotes residential and mixed-use redevelopment in commercial zones while streamlining consumer solar energy installations

North Carolina is taking major steps to modernize its housing landscape through Senate Bill 445, the Regulatory Reform Act of 2026. Designed to cut red tape and expand the availability of attainable living spaces, this legislation streamlines local zoning rules to make constructing Accessory Dwelling Units (ADUs), often called granny flats or backyard cottages, significantly easier across the state’s larger municipalities.

Under the new law, cities with populations of at least 50,000 residents must allow at least one ADU on qualifying single-family residential lots. Local governments retain the ability to enforce reasonable guidelines regarding design, setbacks, and standard building safety codes, but they can no longer prohibit ADUs entirely or subject them to burdensome hurdles. The statute specifically prohibits local municipalities from requiring conditional rezoning, mandating extra off-street parking, blocking long-term rentals, or setting maximum size caps below 800 square feet.

This reform represents a major victory for property rights, flexible living arrangements, and affordable housing solutions. Homeowners gain the opportunity to house aging parents, accommodate adult children, host caregivers, or generate supplementary rental income. At the same time, the broader bill fosters smarter urban growth by enabling by-right residential redevelopment on commercial properties and removing obstacles for residential solar installations. By removing outdated barriers, North Carolina is unlocking versatile housing options to keep pace with statewide growth.